Investors braced for wild market moves ahead of Wednesday’s Federal Reserve meeting. But by day’s end, there was little sign of a momentous shift or the beginning of a new era.
The US central bank kicked off a new rate-cutting cycle with a larger than normal cut, but despite some mild swings during chair Jay Powell’s press conference, major stock benchmarks and government bonds ended the day barely changed compared with where they were before the Fed’s announcement.
The S&P 500 closed the day 0.3 per cent lower, in contrast to pricing in options markets earlier in the week that had predicted a more than 1 per cent swing. The two-year Treasury yield, which is particularly sensitive to monetary policy, dipped just 0.02 percentage points between the policy announcement and Wednesday evening.